SFC Energy AG (F3C) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to our presentation of the unaudited preliminary figures for the full year of 2023. First of all, thanks very much for taking the time this morning. Daniel and myself, we will focus on 2 main topics. The one is, yes, looking back on to a successful year 2023, but then also give you a proper outlook and an optimistic outlook here for 2024. As always, we will look into some of the highlights. We will then give you a more detailed presentation on the sales development as well as on the profitability development. And then close out with the guidance for the year and then actually open up the floor for your questions as well as comments. Looking now into, I'd say, 2023, in terms of highlights, I think we are looking at another record year here for SFC Energy in terms of growth on the revenue side, but also growth and improvement on the profitability side. For us, this is a nondividable pairing and key part of our strategy. Ambitious growth but still step by step, improve profitability. And looking at the past 12 months, I think one can see objectively a significant step up also on the profitability front. 38.6% growth here up to EUR 118 million of revenue, yes. We exceed the forecast of 2023 with this. All of you could witness us being able to move up the guidance throughout the year to the upper end and finally also beyond the upper end, especially for the revenue. And the numbers, I think, reflect this, the numbers presented today. If we also look into the growth as such, I think the structural part is important. It is not coming from 1 region, it is not coming from 1 segment and by no means, we are depending on a single customer. So a healthy distribution of growth in our view. If we then look at the end of the year and if we look at the order book at the end of the year, one could say, well, this is just -- or it was just growing by about 10% and year-on-year order intake even decreased here by 1.6% here from EUR 127 million the year before to EUR 125 million approximate figures here. Yes, still, a, we think starting the year with EUR 80 million backlog is a good thing; and b, especially in the last quarter of last year, we had significant projects here in negotiations, but we opted not to compromise on pricing because of timing. I guess those are long-term partners, and we definitely see those orders ending up with us and this on a stable pricing and margin basis. EBIT and EBITDA adjusted development, Daniel will give you a good view on this. So let me start here with, I'd say, the structural milestones we have achieved last year. If you look into 2023, we started the year off with 4 operational, 4 legal units. We ended the year with 8 operational -- already partially operational and 8 legal units means we were expanding and we have been expanding and we are expanding our international global reach out. Looking at North America, this has been our fastest-growing region here in 2023. Also the largest revenue part, 46%, approximately deriving here from North American customers, Canada and the U.S. Overall growth 43.5% across North America, a significant step. And I think this [ now 3 ] is also the basis here for us investing there, setting up our own operations for sales and service and also logistics in the U.S. after being strongly present in Canada for more than a decade. And the preparation is, I think, well under its way. And we expect to be ready to go here, hiring is ongoing as we speak also by end of the quarter. Beginning of quarter 2, we expect to be operational also in the U.S. If we look into the split here in North America, yes, the fastest-growing region is the U.S. with, let's say, approximately 100-plus percent of growth, more than 130% to be more specific in the U.S. But also in Canada, still one of our home markets, we see, I'd say, more than 20%, 24% growth. India. As a basis for our business, not only for India but also for Asia, I think we were focusing on establishing this throughout the year. We have also, happy for this, some significant also political support, which gave us a lot of recognition in India, especially on our customer base. It is also well recognized that SFC is, let's say, a technology leader in its field. Operation is set up. Production is on its way, and we are delivering first main and large projects out of Gurgaon, here the high-tech zone in Delhi, as we speak within this month. So a big part of the growth in Asia, which is also almost doubling the business, around 90% of growth is deriving here from our successful entry in the market in India. And as said, this serves as a solid foundation for this, let's say, most populous country in the world and therefore, a big market, but also as a basis for other parts of Asia. And it's not just seen as a basis for the sales. We have started to monitor and look into supply chain opportunities here for the group in India as a sourcing base here across our value chain, which will be another area of where we lay emphasis on. Not to neglect the capacity expansion here in Europe. In Germany, we have doubled our capacity here out of Brunnthal, Munich. And in Romania, we are setting up our largest manufacturing location in Cluj next door to the existing one. We have already started to do assembly for EFOY fuel cells besides our traditional electronic products there and we expect to be up and running with, let's say, the new facility opening also in Q2. And by the way, approximately 1,000 units, EFOY core units, were already assembled in Cluj in the last couple of months of 2023. U.K., another step of expansion. The transfer of IP know-how and equipment from our long-term partner, Johnson Matthey, is completed. Construction is going on, and we expect to be able to commence here production of membrane electrode assembly units in the second quarter. There is significant cost naturally related to all this expansion, Daniel will go into this, but also on the MEA side, on the membrane side, we are cognizant of the fact that we have an impact on our material cost here at least, let's say, for the short-term view. First 2 years, we expect an increase of pricing also for our current product offering. In the long run, we are convinced this is a competitive advantage and also the most significant cost reduction potential we have there on the material front as those are the most expensive parts we are using. So looking at, let's say, also the residual growth here, if we talk about regions, I mentioned Asia, I mentioned North America. Where if we look here to the European part of the business, also here, we have a consistent growth there. As said, we have been growing here throughout the past 12, now 14 months in all relevant areas. Also, the European business is growing country-by-country different but between 20% and 30% of overall growth. So substantial 2-digit growth there, too. We look at end markets here, significant or biggest impact, again, from industrial applications with, let's say, 2/3 growth means 66-plus percent of growth. On a relative basis, public security also saw a growth push, naturally at a lower level in absolute terms with the public security business with, let's say, the geopolitical environment changing, comes at least from an SFC perspective to a very welcome and positive renaissance here being a profitable and strong growing part of the business. On end consumer markets, this is the only area where we saw a decline in unit sales. We naturally see an end-consumer hesitance here. The overall economic environment, interest levels, inflation having an impact naturally on high-priced consumer goods. With this, I think we have a good view of the regional distribution and the development of the sales on the segment level. Daniel will also give you a view of the 2 different segments and their development. If we now look into, I think, the macro view to round this up here and to summarize it, I think it is obvious that -- if you also look at it from a European and German perspective, we are seeing a -- let's say, for an insider like us, maybe non-surprising time span here that it takes to move to a hydrogen economy. I think especially on the political end or within the political framework, some, I would say, short-term expectations had to be corrected. And it simply takes time to, let's say, adopt new technologies to get energy transition implemented, and that's what we are seeing in the environment. First of all, projects taking longer. Public households maybe are not available at the time needed. Or to the extent originally anticipated, we see this in Germany in a very recent way. So subsidies at least are postponed. And this naturally poses challenges to players in the industry. But what is not changing, I think, is the long-term view and the social consensus that we need to decarbonize, not only the energy generation and the energy infrastructure, but our overall environment. And the product and the technology SFC is delivering and supplying is paying into this. And I think what we see here is that with our established product offering with a leading industrially mature product offering and the competitive edge out of this and established market access, we have all the chances to benefit over proportionally here from a more difficult and a more challenging environment. And more so, what we are seeing is also opportunities of market consolidation, and we have the firm conviction or plan here to make use of those opportunities based on, I would say, a stable financial position and being in a stable financial condition. And I think all of this together with our plan to further grow on a profitable way here, also sets us apart from especially a big portion of the peer group. With this and with this still optimistic view here despite some macro changes and macro factors that are impacting the industry, I would like to hand over to Daniel to lead you through some of the key numbers.

Good morning, everybody. Thank you for joining our call. There's a little surprise to the numbers. You saw the [indiscernible] that we had published not too long ago. So I believe the numbers that we published to you today are not of a huge surprise. Nevertheless, let's give you some color on the developments on those numbers to the extent we can. Remember they are not audited yet. There's still some audit procedures ongoing, but we are pretty much there. I think Peter mentioned it. It's been a very successful year for us in terms of revenue as well as in terms of profitability. You've seen the revenue growth. We hit EUR 118 million, 38.6%, a little bit above what we initially also expected, were the key drivers, especially in the fourth quarter. We saw some large orders coming in, in the fourth quarter which really -- and we were able to deliver and roll them out, but that really helped on the revenue development. If you look at the segmentation of our revenue between the Clean Energy segment, the segment where we have all our fuel cell business in -- as well as the Clean Power Management business, as the name says, that's where the power management activities are in. We see that both segments showed significant growth. Still, the segment Clean Power Management grew a little bit faster, higher than Clean Energy, obviously, starting from a lower basis from last year. Remember, last year, we did have in this segment where we have a lot of electronic components that are needed in the manufacturing. We suffered severely from the supply chain issues. So it's a little bit of a catch-up on the last year revenues. But looking at both segments, again, strong growth, strong demand, good market environment for the products as well as the target markets for both segments. Looking at the profitability of last year, EBITDA and EBIT adjusted. Again, these numbers are preliminary. We're also above what we initially thought. We're hitting then EUR 15.1 million of an EBITDA adjusted. One of the key reasons, that the fourth quarter went a little bit better than we anticipated. First of all, it's a very favorable product mix in the fourth quarter that we've seen. Remember, we are shipping, to some extent, certain purchase order in lots. I mean there was a big lot of certain products with a nice margin that we were able to ship in the fourth quarter, which then impacted positively the gross margin and subsequently then also the EBITDA margin. Also, we saw a little bit more what we would call operational leverage, and we see that operational leverage on the functional cost is kicking in also a bit more favorable than we anticipated. And that is in spite of the fact, and I know some of you will already have made the math and looked at the margin of the fourth quarter itself. We did give to our employees in the fourth quarter a special bonus for the performance this year. Also had to do with the tax holiday. So that was something we decided in the last weeks of December, given the performance of the group, of the company, also from all of our employees, we decided to give them a special bonus which initially we didn't have in our planning. EBIT adjusted, we're looking at EUR 9.7 million. So that's 3x what we have made in 2022, very attractive in terms of margin, 8.2%. Also much higher from what we've seen in 2022. It's basically a continuation of the -- what we've seen in the first 3 quarters. It's revenue, it's the size, it's operational margin, it's an attractive gross margin that we're looking at, good price structure also on that side. So basically, what we've seen in the first 3 quarters have continued in the fourth quarter, and that led to what we believe a very good margin profile for last year. Looking at the prognosis and what are we moving into the next year. We are very positive when it comes to the market environment. We see, and Peter mentioned it, that demand for our solution, for our products is still very high in spite of a challenging economic environment. But being in the energy transition sector, we do benefit from a couple of trends or megatrends, however you want to put it, and that really helps us in growth, and we do not see any reason to be pessimistic about our growth perspectives. So where we look at our prognosis for the revenue, we're looking at a growth of approximately 20% to 30% to this year's revenue, going EUR 141.7 million up to EUR 155.3 million (sic) [ EUR 153.5 million ]. I think Peter explained the key drivers as well as the order backlog and the entire market environment where we think this is achievable. If we look at our EBITDA, adjusted EBITDA, remember, we cannot plan on the adjustments. We're looking at 17.5% (sic) [ EUR 17.5 million ] and 22 -- sorry, not percent, million, up to 22.4% (sic) [ EUR 22.4 million ]. Why we believe we can at least more or less maintain the margin profile that we're having this year, what we will see is or what we expect to see is a little -- a bit of a higher cost level. We are starting off with our MEA production at the beginning of next quarter, potentially also at the end of this quarter. We mentioned that before in some calls, we expect higher costs for the MEA that we produce ourselves and for the one that we bought previously. It has to do a little bit also with the size of our operation, obviously, ramping up our MEA production is a little bit small and we may not benefit from operational leverage as our supplier did. Also, I mentioned it before at the moment or at the beginning of each process, you don't have the yields yet at maximum. So this all will lead to a little bit of a higher expense. So we expect that. Secondly, also still ramping up our activities in the U.S. We also expect a little bit of higher expense or ramp-up or start-up costs, however you want to call it, this will really have an impact or potentially on our margin. Then the last but not least, if you look at our EBIT adjusted, we're looking at EUR 9.8 million to EUR 14.7 million. So we are looking at a little bit of a higher depreciation than from what we had in the past. This year, it has to do with the IFRS 16 accounting, new premises that we have rented not only in U.K. and the U.S. Remember, we also bring in Romania online. Also, the asset base has increased, equipping those activities in Europe. Last year was -- is only in the financials for a little bit less than 6 months. So all these activities will be in our numbers for the full year, which leads to a little bit of a higher EBIT -- sorry, depreciation. This is the outlook. So overall, we are optimistic. We are convinced that we can maintain our margin profile, to some extent, potentially also expand our margin profile. There are some moving parts in the forecast at this time, mostly internationalization that we're looking at and of course, wrapping up the MEA production, which will -- could have an impact on our margin -- our gross margin, but we mentioned that before. And we're not talking about huge, but it could have an impact. So thank you very much. And with that, I'll return it to Peter.

Thank you. So quick summary here. We are expecting another record year or we are working -- we are expecting for and we are working for another record year in terms of revenue and earnings. The revenue drivers continuously are improving out of 2 elements. Our customers are not depending on subsidies. We have been, I think, developing this over 10 to 15 years. So even a slowdown in the macro environment is not impacting this. And b, the competitive landscape is, at the end, also an advantage for us as we are one of the few ones with established market access and industrially proven products out there. Order book. Give us a couple of weeks. We see a very dynamic start here into the year. It's a good basis. We are accelerating here, and we have a healthy pipeline. Some key projects are due for decision making. As mentioned before, we didn't want to rush it. I think we are in let's say, a finalization stage. And with this all, I think this is justifying our optimism despite an economic environment, especially in parts also of Europe, it's not that positive. We are not depending on 1 region only, not 1 industry only and 1 customer only. So we are as a business very resilient here. And looking at market consolidation, we really expect some opportunities out of this angle. And with this, I'm happy to conclude our part here in terms of presentation. Hand back to Moritz and looking forward to get your question and comments.

[Operator Instructions] And the first question comes from Thijs Berkelder from ODDO BHF.

Congratulations towards a strong Q4 performance. A couple of questions on, first, the '24 outlook. You were guiding for top line growth of 20% to 30% with -- really made clear. It's primarily driven by the, let's say, the fuel cell business. How should I look at that rough -- is it 40% fuel cells, 0% rest? Or more like 30% versus 20% on a divisional basis? Second question is on the one-off bonus payments in Q4. Can you tell us the amount? And can you tell us whether you've reserved such a similar bonus payment in your '24 forecast as well? And for now, final question is on the order backlog. Can you maybe update us on where the order backlog is at this moment more or less?

Yes, Thijs, and thank you very much. Yes, outlook, as always, is an organic growth outlook and one could say, well, you started similar than you started last year with, let's say, a 20% to 30% frame. And to a certain extent, it is similar. But then if we look into the segments, yes, we expect a faster growth here out of the Clean Energy part because this year, we saw some impact, let's say, from some, I'd say, delays and holdups in the year before, especially from the supply chain here on the Clean Power side with naturally a stable environment of growth there. So we'd rather look at, let's say, a 25% and 15% division here between the 2 segments. Regionally, again, we see some differences. So -- but overall, yes, the power electronics part traditionally is more in a 10% to 15% range. And on the fuel cell side, I think 20% to 30% is not unusual. And that's why I think that's, again, the pattern that was there pre-COVID, and supply chain factors impacting the Clean Power side. Talking about the backlog. Our auditors barely let us publish here preliminary numbers for last year. So they would be really somewhat -- I think at least surprised if I now release the current backlog as for the moment. But if you give us another 4, 5 weeks' time, I think when publishing the audited figures we have, I think, a good update also on the backlog. But as to a qualitative statement here, as mentioned, we did not push for a year-end closing for some significant orders here in a double-digit million range on purpose, because usually, if you push on closing, you have to compromise somewhere and pretty often then on the pricing or on the financial front. So we did not push for this. But still, we expect this to come in. And if we look into -- we are today on the 22nd of February. We have a very active and healthy pipeline. Expect us to close some significant orders here within the next couple of weeks. The bigger ones we were -- anyhow, put out there and if you bear with us a couple of weeks to come out with, let's say, quantitative statements on the current backlog, this would help us also. But as you can feel, optimistic as such, but I think justified optimism based on facts. And with the bonus question, I may hand over to Daniel.

So first of all, [ EUR 10,000 for all of us ]. When it comes to the bonus payments, we are looking at a little bit above EUR 200,000 across the group. Why did we do it? Again, we looked at the performance that we had this year, also the effort that all our colleagues put in, in getting these results in and our products out. And there was also still this year a certain tax benefit attached to such bonuses paid to the employees. That's why we decided to do it, yes.

And the next question comes from Karsten Von Blumenthal from First Berlin Equity Research.

In the last year, you had a quite strong gross margin. What do you expect in 2024? Do you expect further increase in gross margins? You mentioned that on one hand, on the cost side, you expect a higher cost, but you hope to pass them on. So on a ballpark basis, what do you think could happen in 2024?

Karsten, thank you. So when it comes to the gross margin, it's a very similar development, so to speak, as the EBITDA margin. So our expectation for the gross margin, it's not something that we just came up with in the last 2 weeks. It's basically really if we look at our long-term guidance, and it's in line with the long-term guidance, we do aim and we do expect that we see a decent opportunity to increase our gross margin in the next 12 months? And it could all ever be, right, that we also see a very slight contraction. So this is the range that we're looking. It's a little bit like the range of the adjusted EBITDA and the adjusted EBIT. At the lower end, we may see a slight contraction. It's really driven by how quickly we can ramp up the [ MEA ] production, how smooth it will ramp up and we will have the yields. Again, we're not expecting a huge impact. We're not expecting any huge troubles, right? But there may be one or the other delay there. So again, long answer to a short question. On the upper hand, we'll obviously see in expansion of the gross margin. And at the lower end, where we're seeing a slight contraction of the gross margin.

All right, thanks for that Daniel. Peter, you mentioned the geopolitical development. Do you believe that the public security business will have a larger share in your product mix in 2024 compared to last year?

Karsten, thanks for being with us. Yes, overall, I think if you look at the business there. Naturally, we see consistent increase in funding here across different geographies. We have naturally a significant impact out of our Indian business here. Last year, there will be, let's say, significant shipments still to India out, let's say, of the ongoing businesses there. We see first orders in again from the Middle East. We are seeing, let's say, also the German part of the business picking up. And I'm talking not strictly just -- or solely about defense customers. We are talking here about also first responders, police, border protection. And one can see that there is, let's say, funding increase. And even in the U.S., we see first project resurrecting that were silent for years. And naturally, we are looking into this now as a growth opportunity. So yes, it takes a larger part of the overall mix and naturally, therefore, also has an impact then finally on profitability development. And as Daniel said, on the upper end of the range, naturally there's also a bigger part -- or has a bigger impact, not just from the, let's say, material cost side but then also from the mix part on the upper end.

Great. Peter, thanks for that. Question regarding your hydrogen business. Peter, you mentioned that we see it everywhere. It takes longer than expected. I mean on your Capital Markets Day, you have, for the first time, shown your 50-kilowatt fuel cell, hydrogen fuel cell you want to bring to the market, I think in Q4 this year. So all in all, how do you see your hydrogen business this year?

Well, overall, I think we have been applying a cautious approach here and all, let's say, the growth realized and also the growth project that is, let's say, not just based on hydrogen or even then subsidized projects as said. What we have in there is really independent of public funding at this point in time. Development projects like the 50-kilowatt then going up to 200 kilowatts here for existing customers, but also new customers like data centers and larger industrial backup power, fully on track, fully on time. I think the limiting factor, if so, is on the people's level means hiring additional experts, additional expertise and talent, yes, is what is with us as one of the key challenges. And then on the market side, Yes, I think it is -- the pace that we have seen now, I think, is the realistic pace. And we will hear -- I would say, grow with the market, but looking at the offering and the competitive landscape on the hydrogen side, this is where we expect a consolidation, especially on the stationary part of the business, which is our core business and for others, it might not be core business anymore.

Great, Peter. Thank you very much for giving this view on the hydrogen business. Last question from my side. Could you give us insight into the main risks you see for 2024? You have given a pretty complete forecast. And you mentioned already one risk that is obviously staff, but perhaps you could add one or two more.

I think if you summarize also, let's say, both our statements here. Naturally, the buildup here and the expansion of our overall corporate and operational structure here from 4 to 8 operational units ramping up production in a few entities here, from Germany to Romania, but then also naturally for the membrane part in the U.K. as well as starting up the team here in the U.S. This is a main focus. And there is naturally risk associated with it. As such, I think we have adapted to it. We have adjusted our corporate structure here where we have functional responsibilities. Now across the group, where we are separating here business development projects and startup projects from the day-to-day business, which is also important to keep ourselves as well as all our team focused here. We have hired more than 130 people last year. We have also lost approximately 30 people here from natural, unwanted, but also wanted fluctuation. And we are still looking at 100 postings that throughout the year are relevant to make sure we get the growth completed. And then on the structural side, we have decided for a uniform ERP platform. We are expanding the usage here of SAP, which has been our ERP platform already in the Netherlands and Romania. We are now rolling this out to all the other locations. And as I think all of you will know from experience or recognize, this is a major undertaking, but it is a must for, let's say, enabling the growth, having a uniform database and making sure we can, let's say, run and steer the business going forward. So if you summarize this, yes, expanding internationally, making sure we get the right number of heads, pairs of shoulders, pairs of hands in but then also making sure we keep track of improving our systems with SAP and IT infrastructure as such. So it's, I think, a set of luxury problems because it's associated to growth. And this is how we look at it and work on it on a daily basis.

And the next question comes from Malte Schaumann from Warburg Research.

First question is on, yes, maybe Japan. I mean that's the only area that had not obviously developed as maybe hoped for. So what would be the milestones you want to achieve this year to maybe then exit the year in a better position to really address the opportunities in that region.

Sorry, Malte. Peter. You're talking about which area we had...

Japan. Japan...

At least myself, maybe it's my age, I don't know.

Toyota Tsusho Corporation.

Yes. We mentioned it also in our last call. And if we look at the overall Asia development, naturally, the success in India out balances, I'd say, some other areas. If you look at Japan, we are really happy and we are executing with Toyota on this plan, as previously also announced. We had an impact throughout the pandemic time where we could not travel to the region here, neither the Toyota guys nor us. We have, let's say, a delay of 18 to 24 months in this program compared to what we agreed upon pre-COVID. We have, let's say, a quarterly management review on this. The next one is up coming here in the mid of March, so in 3 weeks. We are looking at this now country by country. And naturally, we need to also assess where are we progressing according to plan and what do we have to adjust here. In some areas like Singapore, we are independent of Toyota. In Indonesia, we are independent of Toyota, and we are progressing independently with Toyota, I think there's no doubt about Japan and some of the core regions. All the other part is really subject to now a diligent judgment of progress. Are we back on this growth plan that we had before COVID? And then we can say, in some areas, yes, and in some areas no. And based on this, we will sit down and make the judgment together with our partners.

Yes. Okay. That's fair. Then on hydrogen, maybe a follow-up to Karsten's question. [ Maybe you can ] share volume, maybe auto volume or potential revenue volume, you -- is there anything you can talk about for what are maybe quantitative targets for this year are?

Yes. Still, we see naturally a major part here on the mature methanol part of the product offering. And I think, let's say, our overall 90/10 ratio continues here. The -- what is naturally having an impact on the hydrogen side is higher ASPs but we also had to make sure we get the production capacity here up and running. And this is also something where now Romania and, subsequently, also India will help us to accommodate some of the larger systems assembly, which we only can do with, let's say, the constraints we have here in Germany. But I think going forward, especially now for the next 12 months, still 90% of the growth is driven on the methanol product offering.

Would you expect that to materially change next year so that hydrogen will then really kick off?

Well, I think this is -- at the end, again, where we are exposed to an environment. I think our own expectations are pretty realistic here for the next 12 months on an assumption, but also project basis. Beyond this, this naturally depends also on what impact do we see here than for some of the segments there that are really also depending on subsidies and then depending on what do we see here especially. In government in place by that time. Talking about Germany, Europe, but also then talking about the U.S. And therefore, I think all beyond the 12-month period for the time being is, yes, assumption based. If you look into our 5-year plan, yes, as before, we expect a pickup there out of units, but then also out of simply higher ASPs. And on the shorter end of the timeline, again, we do expect some market consolidation and want to play an active role in this.

And do you -- on the consolidation topic, have you already seen players exiting the market. So already leading to a relatively better competitive situation because there's a few competition?

Well, so far to our knowledge, we have not seen somebody going out there. But, yes, being in this industry for quite some time, naturally, there is quite some active, I'd say, communication ongoing in this sector. And especially talking about, let's say, the overall, I'd say, competitiveness, not just from a product maturity perspective, but also, I'd say, from the overall financial viability of individual players, we definitely expect concentration to happen for the stationary part of the market.

I think -- Malte, I think, I mean you're reading the news -- as we are reading the news also. And of course, maybe we have one or the other information. But I mean, from a point of view, if you look at ourselves, and therefore, we're doing most of the time, is you know that we have a very healthy balance sheet, at least we believe that. Look at the 9 months balance sheet. We believe that we're very well positioned if we look at our earnings profile and the growth profile that we've shown also over last year. I think we're very well positioned. So of course, we observe the market, we see what's happening and we are very confident and looking very comfortably into the future.

Yes. Okay. Sounds good. And then my last question is on margin profitability. I mean you mentioned some headwinds at cost level despite that you aimed for a more or less stable margin at gross margin level, gross profit level and even slightly increasing EBITDA margin, I think, was just positive. So you mentioned that one thing is that you further want to raise prices. Is that already through? Has negotiations with customers already ended? Or is that a process that, yes, will then be applied during the year -- during the course of the year?

There is, let's say, naturally, all what we have implemented here what, to an extent, is now materializing and will still materialize also in Q1. And on, I'd say, some significant projects, we are simply in the process also of calibrating the price level. Still, we also have to see that there is -- well, I think we were able to realize price increases across the board here in the last 12, 15 months, 3x fully implemented. We are not intending to have, let's say, another step like this across the board. This is now really on project basis.

And the next question comes from Lukas Spang from Tigris Capital GmbH.

First of all, I would like to come back to the revenue guidance topic and your explanations about order intake and pipeline. So would you still expect these orders you are talking about and negotiate with your customers still to come in, in Q1 or more in Q2? And if so, more than in Q2, should we -- in terms of the revenue development this year, more expect a second half loaded revenue increase?

Lukas, thanks for the question. Peter. Well, if we talk backlog, you will see, I would say, almost an even distribution here between the 2 quarters, if we talk about those projects. These are -- we are talking here about long-term partners. We know about their demand, they know about, let's say, our capacity ramp up. So it's not just that we delayed here the one or the other decision not to be in a [indiscernible], as maybe in previous times to compromise on pricing and come up with, let's say, a year-end rebate to call it like this. The other thing is also we are in a ramp-up phase and the demand we are seeing right now for the first 2 quarters is, I'd say, in some product areas also beyond the current capacity. So we are ramping up capacity here. And if we look into, I'd say, the start of the year, and the first half of the year, we will see, I would say, a significant or a good start here. So we would not expect a back-ended loaded revenue profile. I would rather see it almost the other way around.

Okay. And the timeframe for the ramp-up of these 2 new sites, what is your plan there?

As said before, at the end -- in England, yes, we have, at the end, construction on its way. Equipment transferred, equipment being shipped. We are there, let's say, on a weekly basis. I will -- I personally will be there end of next week to also simply see where we are. We are hiring experienced experts here out of the membrane space. Ramping up in Q2 or even end of Q1, I think, is the very realistic timeline. And then it takes us, let's say, 6 to 8 weeks to get it calibrated. And in the second part of Q2, we are really expecting to get product out of the line that can be used. Romania, slightly different. We started up the production line for the fuel cells already in the current premises. So we are talking here about finalizing construction. Here, as always, with construction work, don't expect it all to be on time. But at least we have already, let's say, the whole -- the building is fully there. Electricians are in to talk practical terms here. And to shift here, part of the production as of April to the new premises, I think, is a very realistic part. We have extended the lease in the current workspace, in the current factory, so we have a transition period of 6, even in a worst case, 9 months if we need the additional capacity. So the assumptions, we feel are very realistic and rather conservative.

And last question about CapEx. What is your CapEx budget for this year?

Again, [indiscernible], let's put it this way. The CapEx for this year will be a little bit higher what we've seen in the last year. Mostly it has to do with the build-out for the sites. As you know, in terms of really equipment, PP&E, we don't have a lot there, but the largest portion we always have is building out the sites, and then we will also invest into IT this year, which will be a larger portion of our CapEx. So if you look at a number and you will understand, I will not give you a precise number, but it will be in the 2-digit million zone, yes. That's where [indiscernible]. Anything slightly above EUR 10 million or so. Again, but this is a special year for us. With a, yes, let's call it, onetime investments that we planned and that's really the building of the sites as well as significant investment in IT infrastructure.

And the next question comes from Thomas Junghanns from Berenberg.

I have two quick questions. The first one specific to your EBITDA. Can you break down the adjusted EBITDA margin or adjusted EBITDA in absolute terms by Clean Energy and Clean Power Management? And the second question is with regard to the planned cooperation with Nel ASA, are there any news with respect to this planned cooperation?

Thomas, getting -- to your first question, apologies, yes, we can. But obviously, these -- apologies, these are the preliminary numbers. So if you bear with us a little bit then we will have the split. Again, don't expect any surprises one or the other way. And sorry, I didn't catch the second question.

Are there any news with respect to the cooperation you planned with Nel ASA?

Yes, Thomas. Peter. If you look at the, I'd say, combination of electrolyzers as well as fuel cells, where we do traditionally the electrification. I think we are assessing and integrating as we speak, different models of electrolyzers here with our with our product series. Some of them are already, let's say, working in the field. Some of it, like, let's say, also our higher power system are, let's say, here in the R&D part. We had to realize that we need to look at the full spectrum of available products and platforms and technologies. So we have widened this to, let's say, other platforms without publishing this in a broad sense. So it is -- and it -- let's say, it was never, let's say, an exclusive activity. Combining the availability and the generation of green hydrogen also with the re-electrification, long term, strategically, I think, is still a good and attractive offering from -- for some of our customer groups.

So there are no further questions at this time. So I hand back to Dr. Peter Podesser for any closing remarks.

Yes. With this, thanks very much for spending those 62 minutes with us. We try to close it out here so that some of you can hop on to the next call here. As always, do not hesitate to reach out to us here, Susan, Daniel, myself for bilateral discussions and more detailed questions. Overall, yes, stay with us. We are looking with, I would say, again, justified optimism to be here, let's say, in 12 months' time and again and again report on a year with, again, higher profits and improved profitability. This is what we work for here for the next, call it, 10-month period, but then also going further. Thank you very much. Goodbye.